The discussion of news, cases, legislation and anything to do with Intellectual Property law, made accessible to everyone.

10 February, 2016

Rights Resurrected - The Use of Abandoned IP Rights

Intellectual property, much like many other forms of property, can become either useless or worthless to a rights holder, even if that would not be the case as it stands when the rights are let go or forgotten. A good example of this is the recent re-emergence of Crystal Pepsi; a clear Pepsi cola drink that was sold during the 1990s. Pepsi had registered the name Crystal Pepsi as a trademark, which it promptly abandoned when the drink failed to become popular. Due to a surge in demand, Pepsi reintroduced the product, and would, arguably, use the previous goodwill associated with the product to protect it (and they did successfully register the trademark again late last year). This begs the question, can you use any abandoned rights you may have in your goods or services, or any other works?

Copyright

Copyright, by its nature, is automatic, and requires no real action on part of the copyright holder. This means that a lack of use does not impact the rights given to the author of any given work, and thus copyright cannot be 'abandoned' through inactivity. In the US the situation is slightly different, and although rights are afforded through common law, one should still register their copyright in order to fully benefit from the federal protection afforded to authors (although a lack of registration does not lead to an 'abandonment' of rights).

In the UK there is no express provision for the abandonment of copyright, and therefore there is no real case of copyright revival, but one could argue that the copyright holder, in ignoring his rights and allowing for the free use and sharing of his works, could be 'abandoning' their rights to the works. One still has to appreciate that the copyright holder can at any time reassert their rights, and thus the copyright in the works is newly resurrected (although, as evident from the above, was never gone to begin with).

Our cousins in the United States do accept the abandonment of copyrights in works. The current law was explained in Capitol Records, Inc v Naxos of America, Inc, where the Court of Appeals set out that "...[the] abandonment of copyright requires (1) an intent by the copyright holder to surrender rights in the work; and (2) an overt act evidencing that intent". Arguably this could be achieved through a statement or the issuance of a public domain licence, or even through another act that shows a clear intent to abandon the rights you have in any given work (although inaction as to the works' protection would not necessarily be enough). It is unclear whether the rights holder could relinquish their rights post-abandonment, but arguably the parties who have used those works during the period of abandonment would clearly be protected.

Trademarks

As illustrated by the above example involving Pepsi, it is very possible to abandon a trademark and re-apply for it (i.e. an alternative), potentially re-appropriating that mark. What is more relevant in the context of trademarks is the potential loss of goodwill, especially in relation to passing off as a common law right, rather than a right under the Trade Marks Act 1994.

In the case of Star Industrial Co Limited v Yap Kwee Kor the Privy Council considered this question, and reiterated the existing tangible connection between a company and its goodwill; however, the latter cannot exist in a vacuum outside of the company's business activities. If a company, with intention, abandons the goodwill in a given product or company, it cannot use it after the fact. This is not as clear as that, however, as in Maslyukov v Diageo Distilling Limited Justice Arnold saw that "...the test is whether the relevant business has been abandoned so as to destroy the goodwill. Mere cessation of business is not enough... [a] cessation of production of goods or provision of services does not necessarily mean that there has been a cessation of business capable of sustaining goodwill". What his judgment seems to illustrate is a need for an active component of abandonment, rather than just a mere stoppage in trading or production, indicating clearly and without a doubt the company wished to abandon all goodwill in the relevant goods or services.

One can 're-appropriate' goodwill in goods even after the end of their production, provided that some actions have been taken to preserve that goodwill (e.g. conducting business in the area of commerce, retention of the subsidiary or corporate entity that held those rights etc.) and no active efforts have been made to truly abandon those rights. This would enable the party to assert those rights under common law in passing off, as if those rights had never been 'abandoned'.

Patents

One can abandon a patent, or an application for a patent, at any time. This would entail either not paying the requisite maintenance fees on the patent (automatically lapsing the patent), or otherwise surrendering the rights to the invention. This is not, however, the end, as it is possible to seek the restoration of the patent within 13 months of it lapsing, although only in the case of 'unintentional' lack of payment of fees. Once the patent has fully lapsed the rights to the patent expire, and there is no way to reclaim those rights (unlike in copyright or under passing off).

As is clear abandoning the rights in your intellectual property might not pay dividends, although does give the rights holder the flexibility to avoid additional legal costs or fees associated with the rights and asserting them. Nevertheless, it still might be possible to relinquish the rights you have abandoned, in very limited circumstances. This writer is a staunch believer in the retention of ones rights, but has to concede that this might not be the best option for every rights holder.

Information

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The Author

Jani Ihalainen (LL.B. (Hons), LL.M.), is a law graduate with a passion for all that is intellectual property law, residing in London, UK.
He also currently works for an international law firm in the City of London.

The name of a company, much like the names of people, carries significant weight in the company's identity in the mind of the consumer a...

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